Volvo's plans to introduce more electric vehicles into its lineup are pretty well documented. The Swedish automaker expects half of its sales to be EVs by 2025 and it plans to introduce five fully electric vehicles by 2021, starting with an electric version of the XC40 later in 2019. Having the ambition to build EVs is all well and good, but it doesn't mean much if the automaker doesn't have the ability to build them.

In order to build a high volume of electric cars, Volvo needed to ensure it had a good battery supplier. This is why Volvo has just signed a long-term agreement with CATL and LG Chem for a multi-billion dollar supply of lithium-ion batteries for the next decade.

"The future of Volvo Cars is electric and we are firmly committed to moving beyond the internal combustion engine," Håkan Samuelsson, the president and CEO of Volvo Cars, said in a statement. "Today's agreements with CATL and LG Chem demonstrate how we will reach our ambitious electrification targets." The agreement covers Volvo and Polestar models built on the upcoming SPA2 and the existing CMA modular vehicle platforms - vehicles like the forthcoming electric XC40 and the recently-announced Polestar2.

CATL of China and LG Chem of South Korea are both renowned battery manufacturers with successful track records. Since CATL operates out of China, its battery expertise will also be used on the entire Geely Group portfolio, which now includes Lotus.

"With today's agreement we effectively secured our battery supply for the upcoming decade," said Martina Buchhauser, senior vice president for procurement at Volvo Cars. "By having two suppliers available in each region we also ensure that we have flexibility in our supply chain going forward." Volvo's first battery assembly line is currently under construction at the company's plant in Ghent, Belgium, where the electric XC40 will be built.